Bank to pay if it fails to abide by RBI circular, harasses customer

Banks sometimes disregard the RBI circulars and even the pro vision of law, and overcharge consumers or harass them. An aggrieved consumer can fight for his rights and get justice under the Consumer Protection Act.


Case Study: Neelam Pansari had given premises to State Bank of India on lease for a period of five years. Against this, he had also obtained a loan of Rs15 lakh from the bank, which carried interest at 15% pa.The loan was to be repaid by depositing 87% of the rental earned each month. When the lease expired, it was renewed for another five years, but the bank hiked the interest rate on the loan to 16% pa, compounded quarterly .

Pansari wrote to the bank against this increase. The bank replied that the issue had been referred to the Reserve Bank of India (RBI) and a decision would be taken soon. Meanwhile, Pansari kept paying interest at the increased rate. He later came across a circular issued by the RBI which stated that there would be no change in the interest rate of loans sanctioned prior to November 16, 1990. He informed State Bank about this circular, pointing out that that the change in interest rate was not applicable to him as his loan had been sanctioned on November 5, 1990. Since the State Bank did not respond, Pansari sought a clarification from the Reserve Bank, which confirmed that the revision in interest rate was not permissible.

Pansari pointed out that he had been overcharged Rs 3,01,599.50 due to the increase in the interest rate. Pansari approached the Banking Ombudsman who partly upheld his contention. As Pansari was not happy with the Ombudsman’s decision, he approached the Bihar State Consumer Commission. The bank contested the complaint. It upheld the bank’s contention that while renewing the lease it was entitled to revise the interest rate and also calculate the interest on compound basis with quarterly rests.

Pansari appealed to the National Commission, which observed that RBI had communicated in November 1995 that banks would not be entitled to charge interest at quarterly rests in respect of loans availed for payment of rents of premises taken on lease. The reason for this is that the interest on the loan should not exceed the lease rent. If compound interest is permitted, the expense by way of interest would be more than the income from rent, leaving a landlord in perpetual debt. To prevent such a situation, the RBI has not permitted charging of compound interest for loans against leased premises.

Accordingly, by its order of May 12 delivered by M Shreesha for the bench presided over by Justice D K Jain, the National Commission held State Bank liable for deficiency in service, and ordered it to refund the excess amount of Rs 3,01,599.50 along with simple interest at 9% pa. Additionally Rs10,000 was awarded as litigation costs. Four week’s time was given for compliance of the order, else it would carry 12% interest for the period of delay .

Conclusion: Banks must be service oriented and not harass consumers.

Jehangir B Gai

ePaper, The Times of India (B’bay) May 15 2017, Page 5 :

(The author is a consumer activist and has won the Govt.of India’s National Youth Award for Consumer Protection. His email is jehangir.gai.columnist@outlook.in)


This Farmer Won the Padmashri for His Zero Budget Natural Farming Model

 

After witnessing the harmful effects of chemical farming, Subash Palekar, a B.Sc in Agriculture, developed the Zero Budget Natural Farming model.

‘Krishi ka Rishi’ is the title farming communities across the country have bestowed on Subhash Palekar. This agriculturist is the creator of the ‘Zero Budget Natural Farming’ model, a method that has been creating waves in the farming community in India.

Palekar was born on 2nd February, 1949 in Belora, a small village in the district of Amravati, Maharastra. The son of a farmer, his interest in farming led him to pursue a B.Sc in Agriculture from Nagpur.

Palekar made his way back to his hometown in 1972 where, armed with the newly acquired knowledge his degree had given him, he began to advice his father on modern techniques of farming and urged him to use pesticides and chemical fertilizers. This led to an increase in crop yield that lasted more than a decade.

By 1985, however, Palekar began to notice a drop in yield; one that only got worse with each harvest. Curious about the sudden change, he began to look into the reasons for the decline. Three years of intensive research led him to the conclusion that chemical farming was the culprit. Palekar learnt that the use of chemical fertilizers and pesticides led to a decrease in the fertility of the soil, wrecked havoc on the ecosystem of the area and also led to long-term health problems for those who consumed the fruits, gains and vegetables harvested under such conditions.

Shocked by the harmful effects of chemical farming, Palekar began the hunt for less-destructive alternatives. Thus began the journey of Zero Budget Natural Farming in India.

IMAGE FOR REPRESENTATION ONLY. SOURCE: FLICKR

From 1986 to 1988, Palekar’s quest for natural farming techniques led him to the study of forest vegetation. It was here that he discovered the natural system at work in forests which allowed them to develop and nurture themselves, while maintaining healthy ecosystems. After careful research of the system, Palekar began to mimic the techniques he had witnessed, in his own farm. For a period of six years, from 1989 to 1995, he experimented and verified different techniques, before consolidating them into the ‘Zero Budget Natural Farming’ technique.

Zero Budget Natural Farming, as the name implies, is a method of farming where the cost of growing and harvesting plants is zero. This means that farmers need not purchase fertilizers and pesticides in order to ensure the healthy growth of crops.

Below are some of key learnings from the Zero Budget Natural Farming method:

It is believed that plants only receive 1.5% to 2% of their nutrient requirements from soil; the remaining is absorbed through water and air. Given that 98% of the nutrients do not come from soil, using fertilizers is not prudent.

We often come across huge trees in forests, their branches heavy with the weight of countless fruit despite the lack of fertilizers and pesticides. These trees are proof that plants can and do grow healthily without any chemical help.

The reason we do not witness the same in our farms is because the micro-organisms that convert raw nutrients into easy-to-digest form have been destroyed by the use of poisonous chemical fertilizers, insecticides and pesticides. Cultivation of soil by tractor has already proved to be detrimental to these micro-organisms.

Since these micro-organisms help convert nutrients into a digestible form that plants can absorb and use, it is critical to revive them in our farms. This can be done by using cow dung from local cows.

Cow dung from local cows has proven to be a miraculous cure to revive the fertility and nutrient value of soil. One gram of cow dung is believed to have anywhere between 300 to 500 crore beneficial micro-organisms. These micro-organisms decompose the dried biomass on the soil and convert it into ready-to-use nutrients for plants.

Over six years of research, Palekar found that:

1. Only dung from local, Indian cows is effective on the soil. Dung from Jersey and Holstein cows is not as effective. If one is falling short of dung from local cows, one may use dung from bullocks or buffaloes.
2. Dung and urine of the black coloured Kapila cow is believed to be the most effective.
3. To get the most of the cow dung and urine, ensure that the dung is as fresh as possible and that the urine is as old as possible.
4. An acre of land requires 10 kilograms of local cow dung per month. Since the average cow gives 11 kilograms of dung a day, dung from one cow can help fertilize 30 acres of land.
5. Urine, jaggery and dicot flour can be used as additives.
6. The lesser milk the cow gives, the more beneficial its dung is towards reviving the soil.

More than 40 lakh farmers across the country have benefitted greatly from Palekar’s teachings and his method of natural farming. Palekar spends 25 days a month sharing his knowledge of farming through seminar, lectures, workshops and field visits. Chief Ministers of Andhra Pradesh and Kerala have also requested him to spend ten days a month in their states, in order to help their farmers develop healthy farming habits.

In 2016, in recognition of his work and the impact he was creating, the Government of India conferred Palekar with the prestigious Padamashri Award. Palekar also made history for being the first active farmer to receive the award.

Palekar’s Zero Budget Natural Farming has undoubtedly made an indelible mark on farming in India.

http://www.thebetterindia.com/55881/zero-budget-natural-farming-subash-palekar/


Company must accept design defect if vehicles need frequent repairs

If a vehicle requires repeated repairs, one can infer manufacturing defect–establishes the following case.

Case Study: Naryan Thakkar had purchased a Mercedes Benz diesel car, model E 220(211). It was purchased in 2003 for Rs 34,88,105. He also spent Rs1,54,524 to get the vehicle registered.

The vehicle was purchased on July 28, 2003, was covered under a two years’ warranty .Within 18 months of purchase, there was a problem with the turbo charger and the engine mount. As spare parts were not available, the vehicle stood idle for a considerable period, awaiting repairs.

After considerable correspondence, the service representative of Daimler Chrysler, inspected the vehicle at Auto Hanger. He also extended the warranty for a further period of four months. The vehicle continued to give problems.

Thakkar filed a complaint before the Maharashtra State Commission. He pointed out that in another case, taking cognizance of an article published in Times Global Business, which had reported about problems when Mercedes had launched its E Class series in 2002 and faced a barrage of complaints about cars not starting or breakingdown repeatedly , the manufacturer had withdrawn 1.3 million defective cars. Thakkar pointed out that the same treatment was not given to Indian customers. Since the company had failed to replace his car, he sought a refund of Rs 36,42,629, claimed a reimbursement of the interest paid for a bank loan to purchase the car. In addition, he demanded a refund of Rs 20,40,871incurred on repairs of the vehicle and asked for compensation and costs.

Auto Hanger contested the case stating that the service centre is only provided certain spares to cover replacements required due to normal wear and tear. If other parts are required, these have to be procured from the logistics centre located in Pune or have to be obtained from the Regional Centre in Singapore or the global centre in Germany has to supply the parts. So Auto Hanger claimed that it could not be faulted for its inability to replace the parts.

Diamler Chrysler questioned the maintainability of the complaint,contending that the vehicle was used for commercial purpose. It alsotried to attribute the problem to unprecedented floods in July 2005 andtermed this to be a natural disaster for which it could not be heldresponsible. The company stated that the vehicle should be inspected by an approved laboratory at Thakkar’s cost to ascertain if there was any manufacturing defect.

The state commission observed that no evidence was produced to show that the vehicle was being used for commercial purpose. So the complaint was held to be maintainable. Defects had developed during the warranty period, and the complaint was filed within two years. So the complaint was held to be within limitation.

On merits, the commission noted that the defects had even before the deluge of July 2005. Even after replacement of several parts, problems persisted. On December 8, 2006, the manufacturer had noted that the torque converter required replacement. The commission concluded that this established that there was a manufacturing defect in the vehicle, without the necessity of it being examined by a laboratory .

Accordingly, by its order of April 28, delivered by P B Joshi along with D R Shirsao, the state commission held Diamler Chrysler and Auto Hanger jointly liable torefundRs36,42,629paidforthevehicle,alongwith12%interest from February 22, 2007 onwards. Additionally Rs 2 lakh was awarded as compensation and Rs 25,000 towards litigation costs.

Conclusion: Testing is not required as repeated defects establish manufacturing defect.

Jehangir B Gai
ePaper, The Times of India (Bombay), May 08 2017, Page 6:

(The author is a consumer activist and has won the Govt. of India’s National Youth Award for Consumer Protection. His email is jehangir.gai.columnist@outlook.in)


ASCI bans 242 ads, including Snapdeal, Amazon, Idea, ToI, ET Now, Zee, Airtel, Coca-Cola, Dhara, Fair & Lovely, Ponds Age Miracle in February 2017

The Consumer Complaints Council (CCC) of the Advertising Standards Council of India (ASCI) has banned as many as 242 advertisements out of 305 complaints it received across segments during February 2017. Out of 242 advertisements against which complaints were upheld, 165 belonged to the Healthcare category, 31 to the Education category, followed by nine in Personal Care Category, 19 in the Food & Beverages category, and 18 advertisements from other categories, the self-regulatory industry body said in a statement.
The banned ads are from prominent companies like Amazon.com (Micromax 32T7260 HDI LED TV), Jasper Infotech Pvt Ltd (Snapdeal), Idea Cellular Ltd (Idea 4G), Bennett Coleman & Co Ltd (Times of India), Times Network (ET Now), Zee News Ltd (Zee Business), Bharti Airtel Ltd (Airtel 4G Data), Dish TV, Coca-Cola, BSNL Corporate among others, they range from FMCGs to autos, personal accessories to alcohol, and education to media.
Click Here for more details and the full list of ads which are banned

National Consumer Helpline (NCH)

 

http://nationalconsumerhelpline.in/

NCH is a project of the Union Ministry of Consumer Affairs operates under the Centre for Consumer Studies at Indian Institute Of Public Administration from The Project recognizes the need of consumers for a Telephone Helpline to deal with multitude of problems arising in their day-to-day dealings with business and service providers.

NCH provides a National Toll Free No1800-11-4000. SMS can also be sent to +918130009809 (charges apply) mentioning the name and city .

A consumer can call to seek information, advice or guidance for his queries and complaints.

National Consumer Helpline supports consumers by:

– Guiding consumers in finding solutions to problems related to Products &
Services.
– Providing information related to Companies and Regulatory Authorities.
– Facilitating consumers in filing complaints against defaulting Service Providers
– Empowering consumers to use available Consumer Grievances Redressal
Mechanisms, Educating Consumers about their Rights and Responsibilities.

NCH VISION

” A Nation of awakened, empowered and responsible consumers and socially and legally responsible Corporations.”

NCH MISSION

“To provide telephonic advice, information and guidance to empower Indian consumers and persuade businesses to reorient their policy and management systems to address consumer concerns and grievances adopting world class standards.”

When you buy goods and services you are protected by the law – the Consumer Protection Act of 1986.

6 Consumer Rights – Protection for the Consumer...

1. Right to Safety – to be protected from hazardous goods & services.

2. Right to information – to be informed about the quality & performance of goods and services…

3. Rights to Choose – to free choice of goods and services

4. Right to be seek Heard – to be heard in decision making process concerning consumer interest

5. Right to redressal – if consumer rights are infringed

6. Right to consumer education .

NCH Initiatives…

Online Consumer Complaint Management System…
NCH Monthly Reports…
Socio-Economic Profile of Callers–Study at NCH…
Concept to identify to finacial loss ..
Newsletter-ConsumerVelocity@NCH…

Upbhokta ki Awaz @ Radio DU CR 90.4 FM…

 

Consumers-cheer-govt-helpline-as-firms-resolve-grievances

http://epaperbeta.timesofindia.com/Article.aspx?eid=31804&articlexml=Consumers-cheer-govt-helpline-as-firms-resolve-grievances-30042017015019#


Nomination Cannot Override Law Of Succession Holds Bombay HC

A division bench of the Bombay High Court has held that the right of succession overrides the rights of a nominee. The bench of Justices AS Oka and AA Sayed have held that the rights of the successors prevail over that of the nominee of a holder of shares or securities appointed under Section 109A of Companies Act, 1953….

Read more and the full judgement at: http://www.livelaw.in/nomination-cannot-override-law-succession-holds-bombay-hc/#.WP96DUHcj5U.whatsapp


BHIM UPI: NPCI says it won’t be responsible for loss or fraud, user fully takes the risk

National Payments Corp of India (NPCI), which is set up as a Section 25 company under the Companies Act 1956 (now Section 8 of Companies Act 2013), and is seen promoting its Unified Payments Interface (UPI)- based Bharat Interface for Money application (BHIM) app, says it should not held responsible for any loss, claim or damage suffered by the user. What is more shocking are the terms and conditions (T&C) for the UPI BHIM app from NPCI, which are one sided and affords no protection whatsoever to the end user or consumer.
In its terms and conditions for use of the BHIM UPI app, the company, promoted by 10 banks, says, “NPCI does not hold out any warranty and makes no representation about the quality of the UPI services or BHIM application. The user agrees and acknowledges that NPCI shall not be liable and shall in no way be held responsible for any damages whatsoever whether such damages are direct, indirect, incidental or consequential and irrespective of whether any claim is based on loss of revenue, interruption of business, transaction carried out by the user, information provided or disclosed by issuer bank regarding user’s account(s) or any loss of any character or nature whatsoever and whether sustained by the User or by any other person. While NPCI shall endeavour to promptly execute and process the transactions as instructed to be made by the user, NPCI shall not be responsible for any interruptions, non-response or delay in responding due to any reason whatsoever, including due to failure of operational systems or any requirement of law.”
The T&C of NPCI are not easily available and one needs to search for it. But whatever is stated in the T&C documents, appears completely one-sided. Take for example point 6.2 in the T&C documents, which emphasises that only the user is responsible for any failed transaction or any loss and neither NPCI nor the bank can be held responsible. It says, “NPCI shall not be liable for any loss, claim or damage suffered by the User and/or any other third party arising out of or resulting from failure of any transaction initiated via BHIM App on account of time out transaction i.e. where no response is received from NPCI or the beneficiary bank to the transaction request. NPCI or the beneficiary Bank shall also not be liable for any loss, damage and/or claim arising out of or resulting from wrong beneficiary details, mobile number and/or account details being provided by the User.”
This means, even if NPCI or the bank fails to send the necessary response, it is the user who is liable for the loss. Therefore, NPCI, the developer and promoter of this UPI BHIM app, and banks on its platform, are under no obligation to send responses to these transactions within time. “NPCI shall not be responsible for any electronic or mechanical defect, data failure or corruption, viruses and bugs or related problems that may be attributable to User telecommunication equipment and/ or the Services provided by any Service Provider,” NPCI says.
Remember the Bank of Maharashtra case, where fraudsters siphoned off Rs25 crore from the lender, using a bug in its UPI app? For such kind of misuse, too, NPCI says the payer is responsible. It states, “The Payer is solely responsible for the accuracy and authenticity of the payment instructions issued via BHIM App. Once a payment instruction is issued, the same cannot be subsequently revoked by the Payer. NPCI accepts no liability for any consequences arising from erroneous information provided by Payer in payment instructions.”
Now, let us see what happened in the Bank of Maharashtra case (Read: UPI bug costs Bank of Maharashtra about Rs25 crore). P Hota, Managing Director and Chief Executive of NPCI, told the Economic Times that the Pune-based bank had procured an UPI solution from a vendor (reported to be city-based InfrasoftTech), which had a bug that resulted in the fund moving out of the accounts without the sender’s account having the necessary funds.
As per the procedure, when the UPI app receives such a request, it sends a query to the other party (customer) and, after obtaining acceptance, it checks fund availability in the UPI-linked bank account. However, the UPI app used by Bank of Maharashtra sent two messages to NPCI, one as ‘success’ and other as ‘error:insufficient funds’. In these fraudulent transactions, NPCI only read the first message and cleared the payment.
This is an interesting situation because the money was taken from accounts which did not have necessary funds. So, who will bear the loss? As per NPCI’s T&C, it cannot be the company or the bank, but the user. However, in this case, the user was not even aware about this fund transfer. In addition, NPCI is not under any obligation to keep a record of instructions, making the job of the investigation agencies difficult.
In its T&C documents, NPCI states that it has no liability or obligation to keep a record of the instructions to provide information to the user or for verifying the instructions. “All instructions, requests, directives, orders, directions, carried out by the User via BHIM App, are based upon the User’s decisions and are the sole responsibility of the User,” it says.
After making claims that over one crore users have downloaded the BHIM app from Google Play Store, the government is now trying to boost its actual use. The government has come out with a customer referral scheme, which promises to pay Rs10 per reference to the referrer and Rs25 for the new user for downloading and transacting from BHIM app. But this will happen only on completion of three unique transactions of Rs50 in total to any three unique customers or merchants.
http://www.moneylife.in/article/bhim-upi-npci-says-it-wonrsquot-be-responsible-for-loss-or-fraud-user-fully-takes-the-risk/50270.html